Since the price of CNG is about half the cost of diesel, they see about a 50% decrease in their operational value
The instant recovery phase of the commercial business vehicles industry looks to have a tinge of ‘green flavour’ with a surge in deals of CNG (compressed natural gas)-powered trucks.
Market for CNG-powered trucks has been rising in the past two quarters due to improved availability of CNG and lower cost of operations.
For Tata Motors, India’s best commercial vehicle firm, CNG models make up 40-50% of intermediate commercial vehicles (ICVs ) / light commercial vehicles (LCVs) and 15% of small commercial vehicles (SCVs), driven by CNG due to higher diesel prices.
VE Commercial Vehicles, the third-largest medium & heavy-duty commercial vehicle company, has indicated that CNG models were doing well in its light and medium-duty truck portfolio. In addition, it has observed about a 50 % swing in support of CNG from diesel.
“In the new commercial vehicle sales, one particular differentiating item that we have witnessed this time is the demand for CNG vehicles. The CNG vehicle sales have been constant at about 25,000 units a year in the past three years. But in the past six months of this year, CNG vehicle sales rose to 31,529 units. That means the new vehicle sales are significantly moving towards CNG, especially in the corridor where CNG is available. After Delhi, CNG availability is reasonably good in the Mumbai-Delhi corridor, says Umesh Revankar, Vice Chairman & Managing Director, Shriram Transport Finance Company Ltd.
Cost is Key
Since the cost of CNG is about half the price of diesel, truckers see about a 50 per cent reduction in their operational cost. Sensing good benefits and profitability, scores of truck owners are also fitting CNG kits in their existing vehicles.
Right now, the CNG availability is good in the corridor of Ahmedabad to Delhi. However, in previous months, there have been new CNG availability in Baroda to Mumbai. Therefore, the Mumbai to Delhi corridor CNG is available at a shorter distance. Similarly, it is now open till Kanpur in UP, and several CNG stations are being ramped up in the Mumbai-Bengaluru corridor, adds Revankar.
Not just in India, but globally commercial trucks have been described as a significant source of emissions and the efforts to make the segment more environment-friendly didn’t see much progress, particularly in India, which is one of the largest CV markets in the world with a very high number of polluting trucks.
Though the Indian government has begun with the announcement of a scrappage policy, there have been considerable efforts to push CNG-powered vehicles as a viable alternative to diesel-powered ones as electrification may take more years in the country.
The efforts to promote CNG with a ramp-up in many CNG outlets across the country have paid dividends; more and more people gain confidence to buy CNG-powered vehicles.
Industry representatives answer that truckers would constantly move towards CNG or even LPG as the latter is more efficient than CNG) as far as the goods carrying is involved. With LPG, trucks can carry double the size. But LPG availability wants to improve. So overall, the next 2 or 3 years will see a massive shift (including retro fitments) towards CNG or LPG.
“When the transportation rate is fixed at diesel price, smart operators use CNG vehicles (or retrofit CNG kits) and make more goods,” says Revankar.
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